Euro to Pound Rate Outlook Neutral Ahead of Key BoE Sterling Risk

March 19, 2025 - Written by Frank Davies

STORY LINK Euro to Pound Rate Outlook Neutral Ahead of Key BoE Sterling Risk

The Pound (GBP) traded in a narrow range against the Euro (EUR) despite Wednesday’s souring trading conditions.

At the time of writing, the Pound Euro (GBP/EUR) exchange rate was trading at around €1.1899, virtually unchanged from Wednesday’s opening levels.

On Wednesday, the Euro (EUR) weakened against most of its major counterparts, even amid negative trading conditions that typically favour safe-haven currencies.

Despite the market environment, the Euro did not benefit from its safe-haven appeal and instead fell against several other currencies.

The decline was largely driven by the strengthening US Dollar (USD), given its negative correlation with the Euro.

On Monday, the Pound (GBP) fluctuated against most of its peers, gaining strength against riskier currencies but losing value against others, amid the downbeat trading conditions on Wednesday.

Sterling, which has become more sensitive to risk, saw gains against other risk-prone currencies. However, its risk-sensitive nature also resulted in losses against safer currencies like the US Dollar.

Moreover, investors may have also been cautious with the Pound, awaiting the Bank of England’s (BoE) interest rate decision scheduled for release on Thursday.

As we look ahead to Thursday, the primary factor influencing the Pound Euro exchange rate will likely be the Bank of England's upcoming interest rate decision.

Any dovish signals from the central bank regarding the future direction of UK monetary policy could weaken Sterling as the week progresses.

Turning to the Euro, the single currency is expected to be influenced by several European Central Bank (ECB) speeches, notably one by ECB President Christine Lagarde.

These speeches could provide insights into the ECB's stance on monetary policy, and any dovish language could similarly undermine the Euro as we move into Thursday’s trading session.

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TAGS: Euro Pound Forecasts Pound Euro Forecasts